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IBK sells part of its stake in Bank IBK Indonesia State-run lender sells an estimated 4%-5% stake to comply with local regulations

Translated by Kim So-in 공개 2021-10-20 08:11:13

이 기사는 2021년 10월 20일 08:07 더벨 유료페이지에 표출된 기사입니다.

The state-run Industrial Bank of Korea (IBK) has sold part of its stake in its Indonesian entity in a bid to comply with local regulations.

IBK has recently sold some of its stake in Bank IBK Indonesia, said industry sources on Monday. The move sparked a rumor that the Korean lender will exit from the Indonesian market.

IBK, however, explained that the purpose of the sale was to comply with local regulations. Financial Services Authority of Indonesia (OJK) requires listed companies to trade at least 7% of their issued shares on the stock market.

IBK owned a 97.5% stake in Bank IBK Indonesia as of the end of June this year, up from 96.06% in May 2020 after a 700 billion rupiah (59.1 billion won) rights offering.

The Korean lender is estimated to have sold a 4%-5% stake in its Indonesian entity through the latest sale to meet the local authorities’ rule. The sale price is estimated to be billions of won based on the book value of the local entity, but it may change depending on local circumstances. The book value of Bank IBK Indonesia was 282.7 billion won as of the end of June.

Given IBK’s plan to use Indonesia as its key platform for overseas expansion, the lender is expected to have sold a minimum amount it has to offload. The higher the ownership, the easier the company can control the entity.

IBK acquired Bank Agris and Bank Mitraniaga in 2018 and merged the two Indonesian banks to create Bank IBK Indonesia in 2019.

IBK entered the Indonesian market to expand its presence in the overseas markets. The bank sought to gain 25% of overseas earnings and 15% of overseas assets from Indonesia by 2023. It set up a new corporate desk for both Korean firms and local firms there.

The bank also planned to open 25 more branches while Bank Agris operated 17 branches in Indonesia and Bank Mitraniaga had 13. Bank IBK Indonesia currently operates 32 branches.

Bank IBK Indonesia has showed worse-than-expected financial performance in recent years. The bank recorded a net loss of 18.2 billion won in 2019. Its net loss increased to 39.4 billion won in 2020 mainly due to unfavorable business conditions after the outbreak of the Covid-19 pandemic.

In the first half of this year, Bank IBK Indonesia posted a net loss of 13.1 billion won. The bank swung back to a net loss in the second quarter after reporting a net profit in the first quarter as its expenses sharply increased after the Financial Services Authority of Indonesia, which had been closely monitoring the pandemic situation, asked the bank to set aside additional provisions. (Reporting by Gyu-hee Kim)
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